Lamy says change in mind-set needed for Bali to succeed

Director-General Pascal Lamy, at an
informal Trade Negotiations Committee meeting on 11 April
2013, said that “the stark reality is that the current
pace of work is largely insufficient to deliver successfully
in Bali...But, more than changing the pace of work, we need
a change in mind-set. We need to move from exploring and
understanding issues to closing gaps. We need to move from
identifying what does not work to finding alternative
solutions to reach consensus.”

Director-General
Pascal Lamy’s statementInformal Trade Negotiations
Committee meeting at the level of head of delegation,
Thursday, 11 April 2013

Thank you all for
coming.

Let me begin our meeting by first outlining the
context and background against which we are preparing for
MC9 and in which our Conference in Bali will take
place.

The forecast released yesterday does not paint a
rosy picture for international trade in 2013. This year
looks to be a near repeat of 2012 with both world trade and
output forecast to expand slowly and below historical trends
and averages. World trade is forecast to grow by 3.3 per
cent in 2013. Although this is higher than the 2 per cent
growth in 2012, it is still below the 20 year average of
around 5 per cent. In addition, downside risks persist,
leaving the global economy fragile and the trading system
facing the risk of protectionism. The world economy remains
in a fragile situation.

Against this uncertain backdrop,
the stakes for Bali are high. And this is why for the first
time since 2008, there is political consensus that the
Ministerial meeting in Bali should be about deliverables in
trade facilitation, agriculture and S&D/LDC issues. This was
the sentiment I gathered during my recent visits to China,
Turkey and the Netherlands.

I see our meeting today not
only as an exercise to promote transparency, inclusiveness
and information sharing, but mainly as a first in a regular
process of continuous narrowing of gaps on the road to
Bali.

With about 27 working weeks to the Bali Conference,
are we on track on our three potential DDA deliverables for
Bali or not?

On all three deliverables there has been a
lot of activity resulting in limited progress on substance.
Let me provide you with a summary of where we are and then
share with you my views on what I believe is needed to
ensure that these issues make it for Bali.

On Trade facilitation the Chair has
restructured the negotiating process with the support of his
four Friends of the Chair, following widespread recognition
at the last NGTF meeting that a draft agreement would not
have been ready for Bali without more intensive work to find
consensus on the text.

The Friends of the Chair have begun
their consultations on their respective portfolios.

In
parallel with the negotiations on the text of the draft
agreement, many developing countries and LDCs are conducting
new needs assessments. These will provide an up-to-date
documentary basis for those Members to start developing the
partnership with donor Members and organisations that they
will need in order to access resources for building capacity
to implement new trade facilitation commitments. An
opportunity for more intensive dialogue and partnering
between recipients and donors will be provided at the
“Trade Fair” to be organised in the May meeting of the
NGTF.

I see two major substantive questions you need to
answer collectively:

• one, what is the shared level of
ambition in beefing up the trade facilitation related GATT
articles: high, medium or low? What is clear is that it
cannot be “high for others” and “low for
me”.• two, is there enough confidence that the
necessary capacity building means will be available to
trigger commitment to new disciplines by poorer
countries.

We also know that the scope of a new Trade
Facilitation agreement will extend well beyond the
traditional areas of responsibility of ministries of trade
and commerce, both in terms of disciplines on border
management and in terms of the new approach Members are
designing to link development assistance with
implementation. It is therefore imperative that capitals
ensure close coordination among all relevant ministries that
will be needed to bring these negotiations to closure in
time for Bali.

On Agriculture, intensive consultations
have continued on the proposals tabled for decision at Bali,
particularly on the G-33 proposal concerning public
stockholding for food security and domestic food aid.

The
Chair of the Special Session launched on 15 February a
technical process related to the G-33 proposal. This process
was led by Mr Jonas Skei of Norway as facilitator and was
seen as useful and informative.

Building on the knowledge
acquired from the technical meetings, Ambassador Adank has
subsequently held informal consultations with
different groupings of Members in a 1+1 format to seek
further feedback from delegations on the proposal itself and
explore possible ways forward. His take from these
consultations, as reported to an informal meeting of the
Special Session on 27 March, is that there is a
willingness to engage on means to address the concerns
expressed by the G-33. However, it is clear that very
significant divergences remain on how to achieve this.

The
substantive issue on this proposal seems to me to be the
following: is there a way to accommodate the proponents'
problem of purchases for stockpiling within the existing
disciplines on domestic support, without destabilising the
rest of the agricultural disciplines.

As he informed the
Special Session, the Chair is continuing with these
consultations in different configurations, seeking to
identify areas where some convergence might be found and
build incrementally out from there.

Regarding the G20
proposal for an understanding on TRQ Administration, the
consultations to date have highlighted that Members continue
to see this as a useful one to explore for possible decision
in Bali, even though there are sensitivities in relation to
some aspects of the proposal that members have not yet
settled. Some of these sensitivities, as well as differing
views, were recalled at the Special Session on 27 March. The
consultative process will need to return to this proposal in
due course.

On the request for studies on the export
competition pillar as well as on export
restrictions, the Secretariat studies on export
competition (TN/AG/S/27) and export restrictions
(TN/AG/S/28) were circulated to the
Members on 21 March 2013. Members who would still wish to
send additional information or who have specific comments
are invited to contact the Secretariat before 15 April so
that their comments can be incorporated in a revised version
of the documents.

It was confirmed on 27 March that the
G-20 is working on a proposal concerning export competition,
which should be submitted soon. Contrasting views emerged on
the suitability of this area as a subject for decision at
Bali, and also on export restrictions.

To conclude, we
have in agriculture an active engaged process but we are
still a long way from agreement in these important
areas.

Coming to the work being done in the Special
Session of the Committee on Trade and Development,
the Chair has continued with his text based meetings on the
three clusters of work, namely the 28 Cancún
Agreement-specific Proposals, the Monitoring Mechanism and
the six Agreement-specific proposals relating to the
Agreements on SPS and Import Licensing Procedures. These
meetings have been complemented by some specific issue based
“informal informals”.

While some progress has been
made in all three areas, there is an urgent need to
re-double our efforts and close the gaps, in what are key
elements of the developmental component of our on-going
work.

The substantive question on this issue is whether
there is a way to allow for a regular review of S&D
provisions in our disciplines across the board and more
importantly, what would be the operational consequences of
such peer review.

On the LDC specific issues —
preferential treatment to services of LDCs, DFQF, ROO and
Cotton — we are still awaiting proposals from the LDCs so
that work can commence on them.

In this respect, I have
been requested by the LDC group to appoint a facilitator to
address the LDC component for Bali. They have expressed
their wish to see Ambassador Steffen Smidt (Denmark)
appointed as Facilitator. I would like to inform you that as
TNC Chair, I will appoint Ambassador Smidt to act as my
facilitator, as soon as he receives the green light from his
capital.

And since we are on LDC issues, let me stress the
importance of reaching agreement on the matter of the
extension of the TRIPS transition period for LDCs, which is
currently set to expire in July, in view of the TRIPS
Council meeting scheduled for 11-12 June which is fast
approaching.

So, assuming my diagnosis is right, the stark
reality is that the current pace of work is largely
insufficient to deliver successfully in Bali. This means
that without rapid acceleration and real
negotiations, it is highly probable that you will
not see the deliverables you desire in Bali.

But,
more than changing the pace of work, we need a change in
mind-set. We need to move from “exploring”,
“understanding” and “discussing” issues to
negotiating to closing gaps. We need to move from
identifying what does not work to finding alternative
solutions to gather consensus.

At this stage, it would not
be responsible to start pointing fingers at others as the
source of the problem. Those of you who are tempted to
engage in blame game at this point, do it at your own peril.
Rather it is time to have a hard look at where flexibilities
can be found to address the three issues on the Bali menu.
It is time to check with capitals that they are ready to
spend the necessary political energy, to provide additional
flexibility to generate convergence across all three
areas.

Work on substance needs to urgently accelerate in
negotiating groups. It is substance that drives the process
and on which progress is gauged. Therefore, written
proposals, language and textual suggestions around which to
build consensus have to begin to emerge very soon. And here
I would caution about over-engineering solutions. There is
no time left to “over-engineer”. The process in
negotiating groups should be Chair-led. But, I must also
stress that the primary responsibility for
negotiation rests with you.

As an insurance policy
for all Members that tactical linkages across the three
areas are preserved, it will be necessary to have a
horizontal review of our progress across the three issues.
The TNC will be central in this. Coupled with a number of
green rooms and small groups in variable geometry. As Chair,
I intend to convene green room meetings every
fortnight to look horizontally at progress in the three
areas and engage in negotiating substance. I intend to
convene the first of these green rooms on 1 May and
then on 14 May. As usual, these will be followed by
TNC meetings to ensure full transparency and inclusiveness.
I can already announce that the next TNC should take place
on 31 May.

But, let me be clear, for any horizontal
review process to be useful and productive, real
negotiations within the negotiating groups need to take
place and remain at the heart of your activities. There can
be no substitute for a meaningful negotiating group
process.

We also know that there are other areas connected
to the WTO agenda that some of you are actively engaged in
which could also be ready in time for Bali, including ITA
expansion and GPA. In addition, the results of the Global
Aid for Trade review in July will also have to form part of
the Bali deliverables.

Finally, on post-Bali, as I
indicated at our last meeting, I am continuing my
consultations under the two assumptions that (i) Bali
delivers and (ii) the consultations do not distract from the
main goal of delivering in Bali. It is clear that the Bali
Conference has to instruct on the Post-Bali process.
However, my view is that this conversation has to continue
before we can arrive at a shared understanding of what the
post-Bali agenda will entail.

On my part, I will continue
my consultations here in Geneva with you, with the Chairs of
negotiating groups and the Chairman of the General Council.
I will also gauge the expectations for and post MC9 from
several stakeholders outside of Geneva. I will start this
next week at the spring meetings of the IMF/World Bank; then
in May, at the mini-Ministerial on the margins of the OECD
meeting in Paris. As always, I will report back to you on my
consultations.

To conclude, we are working on Plan A —
delivering successfully in Bali on the three areas of trade
facilitation, agriculture and S&D/LDC issues. Although the
odds are not bright today, they are still good enough to
warrant a major effort. But, to succeed, you need to
urgently change course, to be more flexible in your
negotiating attitude, to accelerate your substantive work
and to refrain from throwing bricks at each other. These are
the ingredients to avoid hitting a wall with undesirable
consequences not only for Bali, but importantly, for the
credibility of the multilateral trading
system.

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